Fortnite puts a hurting on Activision while Pentagon steps up AI strategy

While the gaming industry may be a huge moneymaker, Activision Blizzard is feeling the effects of one game cornering the market as is the case with Fortnite. Even though Donald Trump continues telling his devout following how great the economy is doing, the nearly 800 workers being laid off would beg to differ with the president.

Video game maker Activision Blizzard is laying off nearly 800 workers as the company braces for a steep downturn in revenue following the best year in its history.

The cutbacks
announced Tuesday illustrate the boom-and-bust cycles in an industry whose fortunes
are tied to video games that can have a relatively short lives before players
move on to the next craze.

Is Fortnite the cause?

Right now,
Epic Games’ “Fortnite” is a hot fad that has been siphoning attention — and
potential sales — from the titles made by other companies.

Although Activision also still owns popular games
such as “Call of Duty” and “Candy Crush,” it expects its revenue this year to
fall by about 20 percent to $6.03 billion.

Activision
will cope trimming 8 percent from its workforce of nearly 10,000 people and
assigning more of its remaining employees to work on “Call of Duty,” ″Candy
Crush,” and several other of its most popular titles.

The Santa
Monica, California, company had already reshuffled its leadership, even though
it profits rose last year by more than five-fold to $1.8 billion. Revenue
climbed 7 percent to $7.5 billion, the highest since Activision’s inception 40
years ago.

But CEO
Bobby Kotick said the performance fell shy of the company’s expectations,
prompting a re-evaluation of its priorities and a pruning of its workforce.

This year
“will require significant change to enable us to achieve our long-term goals
and objectives,” Kotick told analysts during a Tuesday conference call. “We’re
making changes to enable our development teams to create better content for our
biggest franchises more quickly.”

Severance
pay and other costs incurred in the layoffs will result in accounting charges
of about $150 million.

Even as
jettisons workers as some of its revenue evaporates, Activision said it will
also boost its stockholder dividend by 9 percent from last year to 37 cents per
share.

Activision’s
stock rose $1.33, or 3 percent, to $43 in extended trading after the layoffs
were announced.

Pentagon Steps Up A.I. Use

The U.S.
military wants to expand its use of artificial intelligence in warfare but says
it will take care to deploy the technology in accordance with the nation’s
values.

The Pentagon
outlined its first AI strategy in a report released Tuesday.

The plan
calls for accelerating the use of AI systems throughout the military, from
intelligence-gathering operations to predicting maintenance problems in planes
or ships. It urges the U.S. to advance such technology swiftly before other
countries chip away at its technological advantage.

“Other
nations, particularly China and Russia, are making significant investments in
AI for military purposes, including in applications that raise questions
regarding international norms and human rights,” the report says.

The report
makes little mention of autonomous weapons but cites an existing 2012 military
directive that requires humans to be in control.

The U.S. and
Russia are among a handful of nations that have blocked efforts at the United Nations for an
international ban on “killer robots” — fully autonomous weapons systems that
could one day conduct war without human intervention. The U.S. has argued that
it’s premature to try to regulate them.

The strategy
unveiled by the Department of Defense this week is focused on more immediate
applications, but even some of those have sparked ethical debates.

The Pentagon
hit a roadblock in its AI efforts last year after internal protests at Google led the tech company to drop out of Project Maven, which uses algorithms to
interpret aerial video images from conflict zones. Other companies have sought
to fill the vacuum, and the Pentagon is working with AI experts from industry
and academia to establish ethical guidelines for its AI applications.

“Everything
we’ve seen is with a human decision-maker in the loop,” said Todd Probert, a
vice president at Raytheon’s intelligence division, which is working with the
Pentagon on Maven and other projects. “It’s using technology to help speed up
the process but not supplant the command structure that’s in place.”

The
Pentagon’s report follows President Donald Trump’s Monday executive order prioritizing AI
research across the government.

Jeffrey Lang has joined Movie TV Tech Geeks for 2015 and will be providing his opinion on technology from across the pond in London. Along with having many opinions on tech, gadgets, games, etc., he enjoys watching the Thames from our satellite office there.